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Social security fund missing out on revenues

Revenues so far for EFKA, the unified social security fund covering all insured Greek employees, including self-employed professionals, have been disappointing and the next few months until the end of year will be crucial to its financial health.

According to sources, the fund is showing a surplus of 103.4 million euros, well below the end-year target of 245 million. Most alarming is the fact that, despite considerable discounts offered, applications of debtors to the fund for a settlement in up to 120 monthly installments have so far been disappointing.

By August 28, almost 103,000 online applications for debt settlement had been approved, involving arrears of almost 1.6 billion euros. A total of 112.6 million had already been paid.

Despite the fact that the measure targets self-employed, freelancers and farmers – salaried employees’ social security contributions are deducted from their paycheck – these categories still fail to pay even half of what they are currently charged, never mind their arrears. In June, for example, EFKA expected 240 million euros, based on the above categories’ own declarations; only 98 million entered its coffers. This is a collection rate of just over 40 percent.

The end of the pre-election period and the obligation to pay their current dues before applying for the settlement of arrears helped raise revenue to 195 million euros. August is, traditionally, a month of low inflows.

In total, 1.077 billion euros were collected in the first seven months of the year from non-salaried employees’ contributions, or about 154 million a month. While the average collection rate hovers around 60 percent, it is estimated that, in order for EFKA to remain financially healthy, the collection rate must rise to 85 percent. Social security experts say that this is, in theory, very feasible, given that almost eight in 10 self-employed professionals are, on the basis of their statements, charged the minimum contribution of 167 euros per month.

As expected, collection in salaried employment is almost perfect, at a rate of 95 percent. Social security contributions by salaried employees and their employers came to 8.774 billion in the first seven months.